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AMETEK, Inc. (AME - Free Report) has reported fourth-quarter 2020 adjusted earnings of $1.08 per share, which beat the Zacks Consensus Estimate by 4.8%.
Further, the bottom line remained flat on a year-over-year basis and improved 6.9% sequentially.
Net sales of $1.19 billion missed the Zacks Consensus Estimate of $1.2 billion. Notably, the top line rose 6.4% from the previous quarter but declined 8% year over year.
Disruptions caused by the COVID-19 pandemic led to a decline in the company’s top line. Moreover, sluggishness in the Electronic Instruments Group (“EIG”) and Electromechanical Group(“EMG”) segments remained a concern.
Nevertheless, the company delivered a strong operational performance in the fourth quarter.
AMETEK’s proper execution of the four core growth strategies — operational excellence, global market expansion, investments in product development and acquisitions —are expected to continue aiding financial growth in the near term and the long haul. Moreover, the AMETEK Growth Model is likely to continue driving the company’s business performance.
EIG (68.3% of total sales): AMETEK generated sales of $819.4 million from this segment, reflecting a decline of 7% from the year-ago quarter. This can primarily be attributed to the coronavirus pandemic. Nevertheless, the segment delivered solid operating performance during the reported quarter.
EMG (31.7% of sales): The segment generated $379.5 million of sales in the fourth quarter, which declined 11% on a year-over-year basis. The coronavirus-induced headwinds were major negatives. Further, the Reading Alloys divestiture impacted the top line negatively. Nevertheless, the segment delivered strong operational results.
Operating Details
For the fourth quarter, operating expenses were $900.8million, down 10.6% year over year. Further, the figure contracted 210 basis points (bps) from the year-ago quarter as a percentage of net sales to 75.1%.
Consequently, operating margin was 24.9%, which expanded 210 bps from the year-ago reported figure.
Further, operating margin for EIG expanded 270 bps year over year to 28.8% and the same for EMG expanded 110 bps from the year-ago quarter to 21%.
Balance Sheet & Cash Flow
As of Dec 31, 2020, cash and cash equivalents were $1.2 billion, down from $1.3 billion as of Sep 30, 2020.
Further, inventories amounted to $559.2 million at the end of the fourth quarter compared with $584.7 million at the end of the prior quarter.
Long-term debt was $2.28 billion in the reported quarter, down from $2.29 billion in the prior quarter.
The company generated $385.9 million of cash from operation in the fourth quarter compared with $309.7 million in the previous quarter.
Further, AMETEK generated free cash flow of $348.9 million in the reported quarter.
Guidance
For first-quarter 2021, the company expects a sales decline of low to mid-single digitson a year-over-year basis. The Zacks Consensus Estimate for first-quarter sales is pegged at $1.21 billion.
AMETEK expects adjusted earnings of 97 cents to $1.02 per share. The consensus mark for the same is pegged at $1.03 per share.
For 2021, the company expects a sales increase of mid-single digits on a year-over-year basis. The Zacks Consensus Estimate for 2020 sales is pegged at $4.88 billion.
Adjusted earnings are anticipated to be $4.18-$4.30 per diluted share, suggesting growth of 6-9% from 2020. The Zacks Consensus Estimate for earnings is projected at $4.22 per share.
Long term earnings growth rate for Take Two Interactive, CDW, And CrowdStrike are currently pegged at 12%, 13.1% and 25%, respectively.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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AMETEK (AME) Q4 Earnings Beat Estimates, Revenues Decline Y/Y
AMETEK, Inc. (AME - Free Report) has reported fourth-quarter 2020 adjusted earnings of $1.08 per share, which beat the Zacks Consensus Estimate by 4.8%.
Further, the bottom line remained flat on a year-over-year basis and improved 6.9% sequentially.
Net sales of $1.19 billion missed the Zacks Consensus Estimate of $1.2 billion. Notably, the top line rose 6.4% from the previous quarter but declined 8% year over year.
Disruptions caused by the COVID-19 pandemic led to a decline in the company’s top line. Moreover, sluggishness in the Electronic Instruments Group (“EIG”) and Electromechanical Group(“EMG”) segments remained a concern.
Nevertheless, the company delivered a strong operational performance in the fourth quarter.
AMETEK’s proper execution of the four core growth strategies — operational excellence, global market expansion, investments in product development and acquisitions —are expected to continue aiding financial growth in the near term and the long haul. Moreover, the AMETEK Growth Model is likely to continue driving the company’s business performance.
AMETEK, Inc. Price, Consensus and EPS Surprise
AMETEK, Inc. price-consensus-eps-surprise-chart | AMETEK, Inc. Quote
Segments in Detail
EIG (68.3% of total sales): AMETEK generated sales of $819.4 million from this segment, reflecting a decline of 7% from the year-ago quarter. This can primarily be attributed to the coronavirus pandemic. Nevertheless, the segment delivered solid operating performance during the reported quarter.
EMG (31.7% of sales): The segment generated $379.5 million of sales in the fourth quarter, which declined 11% on a year-over-year basis. The coronavirus-induced headwinds were major negatives. Further, the Reading Alloys divestiture impacted the top line negatively. Nevertheless, the segment delivered strong operational results.
Operating Details
For the fourth quarter, operating expenses were $900.8million, down 10.6% year over year. Further, the figure contracted 210 basis points (bps) from the year-ago quarter as a percentage of net sales to 75.1%.
Consequently, operating margin was 24.9%, which expanded 210 bps from the year-ago reported figure.
Further, operating margin for EIG expanded 270 bps year over year to 28.8% and the same for EMG expanded 110 bps from the year-ago quarter to 21%.
Balance Sheet & Cash Flow
As of Dec 31, 2020, cash and cash equivalents were $1.2 billion, down from $1.3 billion as of Sep 30, 2020.
Further, inventories amounted to $559.2 million at the end of the fourth quarter compared with $584.7 million at the end of the prior quarter.
Long-term debt was $2.28 billion in the reported quarter, down from $2.29 billion in the prior quarter.
The company generated $385.9 million of cash from operation in the fourth quarter compared with $309.7 million in the previous quarter.
Further, AMETEK generated free cash flow of $348.9 million in the reported quarter.
Guidance
For first-quarter 2021, the company expects a sales decline of low to mid-single digitson a year-over-year basis. The Zacks Consensus Estimate for first-quarter sales is pegged at $1.21 billion.
AMETEK expects adjusted earnings of 97 cents to $1.02 per share. The consensus mark for the same is pegged at $1.03 per share.
For 2021, the company expects a sales increase of mid-single digits on a year-over-year basis. The Zacks Consensus Estimate for 2020 sales is pegged at $4.88 billion.
Adjusted earnings are anticipated to be $4.18-$4.30 per diluted share, suggesting growth of 6-9% from 2020. The Zacks Consensus Estimate for earnings is projected at $4.22 per share.
Zacks Rank & Key Picks
AMETEK currently has a Zacks Rank #3 (Hold).
Some other top-ranked stocks in the broader technology sector are Take Two Interactive (TTWO - Free Report) , CDW Corporation (CDW - Free Report) , and CrowdStrike (CRWD - Free Report) . All stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long term earnings growth rate for Take Two Interactive, CDW, And CrowdStrike are currently pegged at 12%, 13.1% and 25%, respectively.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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